Questions about the process of buying a house

Hello everyone,

I have already been able to read quite a bit here and have also browsed through many older posts.

Now I have finally registered to actively participate in the discussions :)

We are about to buy a plot of land (from a private seller) and a prefabricated house and get everything settled.

Now I have a question whether everything we are doing here is "correct."

Where is the best place to start?

So, the following: We have basically "chosen" a house and had the seller create or adjust an offer accordingly. Then we looked at our planned plot of land together and discussed some details.

After that, we signed the construction contract or, rather, only signed to lock in the price stated in the offer (due to the current price increase, which apparently is to take place this week). This also locks in the current prices for the selection of materials and options.
The document says "Construction Contract (Offer)"

Regarding the general process, I am somehow not sure if everything makes sense.

Basically, we have decided on a house-building company X with which we want to build. However, the seller also works "on the side" as a self-employed real estate consultant who will then take over the planning. Is that usual?
We pay €4000 for this, which will be deducted from the house price. This includes the planning, the handover to the architect, and all the official matters like the building permit inquiry, etc.

What happens if, during the selection of materials and options, it turns out that our set budget is no longer sufficient due to changes or whatever, and we end up far exceeding it?

Unfortunately/fortunately, I am more of a skeptic and, despite all the excitement about our project, still try to look at things objectively and, of course, do not want to be taken advantage of.

Unfortunately, I can’t find anything about a normal process for how such a house contract comes about.

How was it for you?

Thanks already for your answers to my questions :)

Best regards

Hello,

hm, to be honest, I’m not entirely happy with your approach now.

What happens, for example, with the contract for work if you don’t get "your" plot of land, for whatever reason?

Does the house you selected fit within the development plan valid for the plot of land?

What exactly is a Immobilien Consult? What do they plan? Why do you need an "additional" architect?

Does the contract for work and the associated price include a foundation slab or a basement?

Are incidental building costs (approx. TEUR 30 - 45 per house) included in your calculation?

Have you already spoken with a bank about the possible financing amount?

Do you have references from the prefabricated house company and the Immobilien Consult?

Being pressured to sign with the argument of a "price increase" is also not necessarily the best approach for an investment of this size.

Regards,

Dirk

Hello Dirk,
thank you for your quick response, which is very constructive!!!

To answer your questions:
The matter with the property is currently proceeding, the seller has been taking care of a notary since today to get everything finalized.
She has also already made it clear to the other interested party that the property has already been allocated.
In general, however, we have the right to withdraw from the contract for work, for example, if we are not allowed to build on the property or if there are problems with the development, etc.
There is no development plan (construction in accordance with neighboring buildings §34), so I had to make some phone calls to make progress in this direction. I called the municipality and the district administration to get more information. According to the neighboring building, construction is allowed, which according to the seller is compatible with our desired house and there should be no problems.

Regarding the real estate consult, I took the liberty of sending you a PM so that we are on the same page :)

The offer also includes a basement, as well as preparations for a garage to be built later.

We have incidental construction costs of €20k included in the planning.
Our cost planning includes (at this point only roughly the main points):
- Property + 10% incidental costs
- House (including basement) -> turnkey, with some points removed that we will do ourselves
- Own contribution (material)
- Incidental construction costs (€20k)

We have already spoken several times with the bank and our building savings contact person to pursue the best possible way; everything fits well so far.

I have requested references and am waiting to receive them and then contact them.

Best regards

Hello Mark,

well, that sounds already much better than your first post. :)

Regarding ancillary building costs: Take a look at the list that the construction expert here from the forum has compiled:



Personally, I find EUR 20,000 somewhat tight in calculation.

If I were in your place, I wouldn’t submit a formal building pre-application either. Especially with a development according to §34, I would schedule an appointment with the responsible building authority and visit them with your first draft and information about the plot. That’s how we did it and had very good experiences with this approach.

Once you have concrete figures, you can also inquire about financing from a freelance credit broker and the major life insurance companies in addition to the bank and building society - they currently have fairly attractive conditions as well.

Basically, I also consider a preliminary material selection to be a helpful thing, but since you have already signed the contract for work, that is probably rather difficult.

I don’t know your house provider directly, and I also didn’t find anything quickly here in the forum. You should check the references carefully.

It’s also not a mistake to have the contract for work reviewed by a lawyer. That’s what we did with our construction company as well.

Regards,

Dirk

Good evening,

Subsequently, we only signed the contract for work to have the price fixed in the offer (due to the current price increase that is supposed to take place this week).

The price increase in the industry will either take place on 12/31/14 or on 01/01/2015.

What exactly do you mean when you write "only signed the contract for work to have the price fixed in the offer"? A contract for work is always a contract for work!

In general, however, we have the right to withdraw from the contract for work if, for example, we are not allowed to build on the plot, or there are problems with the development, etc.

What about the services provided so far by the architect, in my opinion?

There is no development plan (development according to neighboring development §34), so I had to make some phone calls to get further on this, I called the municipality and the district administration to get more information in this regard.

Did you get information before or after you decided on the provider xyz?

Basically, we have decided on a house building company X, with whom we want to build. However, the seller is also "self-employed on the side" as a real estate consultant, who will then take over the planning. Is that common?

If your provider is actually a prefabricated house provider, it is not uncommon that the prefab house provider "only" sells the bare house from the foundation slab, and that an additional architect is needed who creates the designs, the building application, as well as the execution plans.

Furthermore - there are also selling architects ;)

We pay €4000 for this, which will be deducted from the house price. This includes the planning, the handover to the architect, and all the authority matters such as the construction inquiry, etc.

I don’t understand that - if there is a planner, why do you need an additional architect?

Are you really sure that the €4000 also covers the costs of the preliminary building permit (BVA)? By the way, I agree with Dirk here - in a §34 area, this effort is generally not required, maybe a road drainage, but no BVA if built analogously to the neighboring development.

What if, during the selection of fixtures and fittings, it turns out that our set budget is not sufficient due to changes or whatever and we go far beyond it?

To roughly check this in advance, you need the construction description (BB) and a cushion "reserve for extras."

Our cost planning includes (at this point, just roughly the main points):
- Plot + 10% incidental costs
- House (incl. basement) -> turnkey, with some items taken out that we will do ourselves
- Own contribution (material)

With this information, not much can be done if you don’t specify the house size, equipment, and building location.

- Additional construction costs (€20k)

Dirk has rightly written here that you will not manage with that.

I have requested references and am waiting to receive them and then to contact them.

After signing the contract?

Regards from the Rhineland